top of page

How to Manage Financial Stress

By: Pascale Hansen, Financial Expert on Cyno

Financial stress is emotional tension that is specifically related to money. Anyone can experience financial stress no matter how much, or how little, money they make.

The reasons for financial stress differ for all of us, but following steps are what I recommend to manage and overcome it:

1. Identify The Problem

The first thing you need to do is identify what is causing the stress. Look directly at the financial situation causing you stress. Avoiding facing the problem will only make things worse. Is it heavy debt that seems insurmountable or is it the constant stress from living paycheque to paycheque with no progress on any life goals?

No matter the problem, the first step is defining the problem as that will determine steps to resolving it. For example, debt can be resolved with a debt elimination plan. The problem of living paycheque to paycheque requires reducing expenses and/or finding ways to supplement your income.

2. Set Goals

In order to create a plan to eliminate a problem you have to have the internal motivation to execute the plan. Your pain has to be deep enough and your vision for a better life without that pain has to be compelling enough for you to commit to the plan. If you lack the motivation, you won’t take the necessary steps to resolve your problem. Be honest with yourself. Are you ready to do the work? If so, set your financial goals.

3. Review Your Spending

In order to manage your money you need to be fully aware of how much you’re spending. If you leave this to chance you will never be able to set financial goals and achieve them. Every dollar coming to you needs to have a job. It’s either to be put towards cover an expense, an immediate want, saving for a future goal or invested for retirement. Your age and income don’t matter, this is a critical life skill and the sooner you start the better. If you don’t learn how to manage your cash when you’re working you’ll be setting yourself up for a miserable retirement (if you’ll be able to retire at all).

4. Create a Spending Plan

A spending plan (or budget) is a powerful tool for taking control of—and understanding—your finances. It will tell you how much you’re spending on necessities and how much you have left over to put towards your goals.

Once you have a full picture of where your money is going every month, you can look for opportunities to redirect some of it to the areas causing your financial stress such an increasing you’re the amount going to debt repayment.

5. Eliminate Your Out-of-Control Debt

There are two types of debt: “controlled” debt and “out-of-control” debt.

“Controlled” debt is debt with a definitive last date of repayment, such as a car loan or mortgage. “Out-of-control” debt is debt you may have where you do not know when the full debt will be repaid.

Credit card debt is a common source of “out-of-control” debt and financial stress. Not only is it expensive—it can also get in the way of your savings goals and affect your credit score which means it will cost you more when you apply for a mortgage or even worse, it may prevent you from getting any type of loan. The anxiety antidote: a plan to pay off the debt and a plan to avoid it in the future (see the next step).

6. Build an Opportunity Fund

In order to stay out of debt, it’s critical to have an opportunity fund. A lot of financial advisors refer to this as an “emergency fund” because it is to take care of unexpected expenses such as car or house repairs, job loss etc. I like to call it an “opportunity fund” because it gives you the opportunity to stay out of debt. Instead of putting an expense on a credit card without knowing how you will repay it, you can use the money from your opportunity fund. Your TFSA is great for this as you can replenish any funds used without penalty (as long as you don’t overcontribute). I recommend having a minimum of 6 months of living expenses or more if you’re older and/or work in an industry where it may take longer to find a job in case you find yourself back on the job market. It may seem daunting to save that much money but it will give you peace of mind when you need it. Save as much as you can comfortably and with any savings goal just remember to be patient and consistent. Have the determined amount directly deposited into your savings account as soon as you get paid and rember the habit is more important than the amount.

7. Track your progress.

Knowing how much money you actually have, rather than sitting in uncertainty, will reduce your stress levels and help you build a more positive relationship with money in general. Review your spending plan regularly to make sure you’re on track with your spending and achieving your goals. Make sure to celebrate your milestones! Enjoy the results of managing your money.

8. Ask for Help

For many people, the most difficult thing about financial stress is the guilt and embarrassment that it causes. In a society as materialistic as ours, it can be difficult to admit that you are struggling to balance your daily finances. It takes courage to ask for help but it can be worthwhile to eliminate your stress and get a plan that will be the roadmap to a bright future. You don’t have to solve your financial problems alone. I’m available to help you and I look forward to hopefully speaking with you soon.

Pascale Hansen

Money Coach


If you want to learn more about how Cyno can help your company, book a call with us!

bottom of page